Posted By Paul
I doubt many of us can relate to a sudden inheritance of $10 million, but I thought this article was interesting. If nothing else it is an object lesson on how quickly windfall money can disappear when we are not careful:
Family's Fall from Affluence Is Swift and Hard
Sunday, December 5, 2010
Wednesday, December 1, 2010
Article: Free Stuff Online - Don't Buy It
Posted By Paul
Ever see those 'Free iPad by clicking here' ads? Well this was an interesting article where someone actually tried clicking on the ads to get the free iPad.
Not a big surprise that it was a scam, but it was interesting to learn exactly what kind of scam it was:
Free Stuff Online - Don't Buy It
Ever see those 'Free iPad by clicking here' ads? Well this was an interesting article where someone actually tried clicking on the ads to get the free iPad.
Not a big surprise that it was a scam, but it was interesting to learn exactly what kind of scam it was:
Free Stuff Online - Don't Buy It
Monday, November 22, 2010
Finally dipping into the rainy day fund.
Posted By Paul
Those of you who follow Frugalize know that Matt and I strongly encourage people to have a rainy day fund ready for life's little emergencies.
I've been building an emergency fund for years and recently found myself in a spot where I actually used it.
Here was the series of events that made me very glad that I had my rainy day fund (many of which are mentioned in prior posts):
1) The roof - even though I saved money on doing the roof vs. paying someone there were expenses related to that which depleted my checking account. (Equipment, supplies, etc.)
2) Leaky pipes - it was a quiet afternoon when I saw the wet patch on my ceiling. Two minutes with a dry wall saw and one bucket of really gross water later and I discovered the leaky pipe. It wasn't the end of the world but it did cost some money to have the plumber come out and fix it. I believe in do it yourself when possible, but when it comes to leaky pipes I don't take chances.
3) Bad washer and dryer - The washer and dryer gave out on us. After many do it yourself repairs and years of faithful service our washer and dryer amazingly both gave out at about the same time. The repairman came and declared them "so broken that it would be cheaper to replace them" which is what we did.
4) Bad dishwasher - Not more than two weeks after the washer and dryer gave out our dishwasher also gave up the ghost. A similar story here. We called a repairman, he came, said that there were major issues with our dishwasher and it would be cheaper to replace it.
None of the above events had a huge financial impact, but putting them all together made for quite a bill.
It made me VERY happy that I had my emergency fund to dip into. Had it not been for the emergency fund we would have had to have either come up with the money some other way (borrow against retirement accounts - bad, putting it on credit cards - bad) or just plain do without those appliances for a while (which would have been doable but a hassle).
So now that hopefully the expenses have settled down for a while (knock on wood) our plan is to replenish our rainy day fund so that it is back up to full power. It was a good lesson for me to discover that the rainy day fund isn't just for an unexpected big event, it is just as likely to come in handy when you are faced with a quick series of small events.
Those of you who follow Frugalize know that Matt and I strongly encourage people to have a rainy day fund ready for life's little emergencies.
I've been building an emergency fund for years and recently found myself in a spot where I actually used it.
Here was the series of events that made me very glad that I had my rainy day fund (many of which are mentioned in prior posts):
1) The roof - even though I saved money on doing the roof vs. paying someone there were expenses related to that which depleted my checking account. (Equipment, supplies, etc.)
2) Leaky pipes - it was a quiet afternoon when I saw the wet patch on my ceiling. Two minutes with a dry wall saw and one bucket of really gross water later and I discovered the leaky pipe. It wasn't the end of the world but it did cost some money to have the plumber come out and fix it. I believe in do it yourself when possible, but when it comes to leaky pipes I don't take chances.
3) Bad washer and dryer - The washer and dryer gave out on us. After many do it yourself repairs and years of faithful service our washer and dryer amazingly both gave out at about the same time. The repairman came and declared them "so broken that it would be cheaper to replace them" which is what we did.
4) Bad dishwasher - Not more than two weeks after the washer and dryer gave out our dishwasher also gave up the ghost. A similar story here. We called a repairman, he came, said that there were major issues with our dishwasher and it would be cheaper to replace it.
None of the above events had a huge financial impact, but putting them all together made for quite a bill.
It made me VERY happy that I had my emergency fund to dip into. Had it not been for the emergency fund we would have had to have either come up with the money some other way (borrow against retirement accounts - bad, putting it on credit cards - bad) or just plain do without those appliances for a while (which would have been doable but a hassle).
So now that hopefully the expenses have settled down for a while (knock on wood) our plan is to replenish our rainy day fund so that it is back up to full power. It was a good lesson for me to discover that the rainy day fund isn't just for an unexpected big event, it is just as likely to come in handy when you are faced with a quick series of small events.
Friday, November 19, 2010
Article: Black Friday's dirty little secrets.
Posted by Paul
I've never been a Black Friday participant (they pretty lose me at 'wake up early on a day off'), but I've always been intrigued by the tradition.
I found an article about things to watch out for on Black Friday. An interesting read, but one point in particular surprised me.
It was referring to the idea of "derivative models" essentially sale models that lack features from the standard model. They use an example of a Samsung TV being advertised as a Black Friday special at Wal-Mart. Here is an excerpt from the article:
---
"That model doesn't appear on Samsung's web site. Maybe it was made just for Black Friday," he said. Another red flag, the deal on that TV just lists the deal price and not the regular price of the model.
---
I had no idea that there might be special models made just for Black Friday or other sales. It seems like the consumer really needs to research sale models carefully, especially with electronics where model numbers and feature sets are often complicated.
The whole article can be read at the link below:
Black Friday's dirty little secrets
I've never been a Black Friday participant (they pretty lose me at 'wake up early on a day off'), but I've always been intrigued by the tradition.
I found an article about things to watch out for on Black Friday. An interesting read, but one point in particular surprised me.
It was referring to the idea of "derivative models" essentially sale models that lack features from the standard model. They use an example of a Samsung TV being advertised as a Black Friday special at Wal-Mart. Here is an excerpt from the article:
---
"That model doesn't appear on Samsung's web site. Maybe it was made just for Black Friday," he said. Another red flag, the deal on that TV just lists the deal price and not the regular price of the model.
---
I had no idea that there might be special models made just for Black Friday or other sales. It seems like the consumer really needs to research sale models carefully, especially with electronics where model numbers and feature sets are often complicated.
The whole article can be read at the link below:
Black Friday's dirty little secrets
Wednesday, November 17, 2010
Article: Spending Tips From Frugal Billionaires
Posted By Paul:
Here is an article I enjoyed about "frugal billionaires". It was kinda cool to read about people worth a billion dollars driving a Corolla.
Check it out:
Spending Tips From Frugal Billionaires
Here is an article I enjoyed about "frugal billionaires". It was kinda cool to read about people worth a billion dollars driving a Corolla.
Check it out:
Spending Tips From Frugal Billionaires
Saturday, September 18, 2010
Another Appliance Repair Story
Posted By Paul
A couple of weeks ago while I was working on the roof (see my earlier post: My Biggest Do It Yourself Project) our washing machine stopped working. We called a repairman who essentially said that the cost to repair it would be more than the cost to get a new one.
I was busy working on the roof so I didn't have time to deal with the washing machine so we weren't sure what to do.
Luckily the in-laws had a spare washing machine. Not only was it in great shape but they were able to bring it over the next day and we were able to wash clothes again.
Then just last week the "new" washing machine started to have problems. Specifically it suddenly stopped draining the water. My first thought was: "Sigh... we should have just bought a new one." So my wife and I were planning on going shopping that weekend, but then I decided that I would at least pop open the washing machine and make sure it wasn't something simple like a coin in the drain pipe or something.
When I opened up the washing machine I discovered this:
That is a sock that was stuck in the input to the drain pump.
It was REALLY wound up in there, even with vice grips and pulling I couldn't get the sock out. Ultimately I had to put a screwdriver in the other side and little by little force the propeller to unwind the sock.
Once I got the sock out I COULD have just put the pump back in but I decided to replace it (the pump, not the sock) since I had gone to the trouble of removing it plus the fact that the spot where the shaft drives it looked a little stripped (no doubt from when it was running with the sock in there).
I found the part on AppliancePartsPros.com
but I decided to see if I could find it at my local appliance repair store so that I didn't have to wait to get it shipped out.
I got the part at my local small appliance repair store (I highly recommend that everyone find their local small appliance repair place, it's often a great source of parts and even advice). It cost me a little more to get it from the local store, but I was able to walk out with it and install it that night.
The installation of the new pump went well. However there were two snags (both due to my own incompetence):
1) After putting the pump in I was closing up the machine when I heard a "clink" and saw one of the springs in the back had come loose due to my moving around of the tub assembly. Try as I might to re-attach it, I discovered that the only way to reach it was to essentially remove the tub assembly from the casing. It wasn't hard to do, but it was annoying to think (as I was dis-assembling my washing machine) that were it not for that spring coming loose I would have been done long ago.
2) After reattaching the spring and closing up the machine I started a cycle with the tub empty. After some water came in I advanced the dial to the point where the pump should engage. As I had hoped water came out of the drain tube. So the next day I told my wife it was ready for duty. I didn't realize that while disassembling the machine for item 1 I had accidentally disconnected the sensor that tells the machine when to shut the water OFF. So our first load resulted in a wet mess on the floor. Luckily when I opened up the washer cabinet again I saw a tube that went from a sensor on the washtub to...nowhere and realized my mistake and reconnected it.
So overall I'm really happy that we didn't just buy a new machine or call a repairman. Usually a repairman call is at least $100 plus parts and I spent half that on my replacement part. Granted I spent several hours fiddling with the machine but now I feel that I know how a washing machine works and the actual troubleshooting and fixing of the problem was kind of fun.
The only remaining mystery is how the sock got in there in the first place, but some googling suggests that it isn't unheard of for a sock to slip between the metal inner tub and outer tub and work its way down to the drain pump. Interestingly enough the sock didn't look like one of ours so we think it belonged the previous owners. At least the next time the drain stops working I'll know exactly where to look.
A couple of weeks ago while I was working on the roof (see my earlier post: My Biggest Do It Yourself Project) our washing machine stopped working. We called a repairman who essentially said that the cost to repair it would be more than the cost to get a new one.
I was busy working on the roof so I didn't have time to deal with the washing machine so we weren't sure what to do.
Luckily the in-laws had a spare washing machine. Not only was it in great shape but they were able to bring it over the next day and we were able to wash clothes again.
Then just last week the "new" washing machine started to have problems. Specifically it suddenly stopped draining the water. My first thought was: "Sigh... we should have just bought a new one." So my wife and I were planning on going shopping that weekend, but then I decided that I would at least pop open the washing machine and make sure it wasn't something simple like a coin in the drain pipe or something.
When I opened up the washing machine I discovered this:
That is a sock that was stuck in the input to the drain pump.
It was REALLY wound up in there, even with vice grips and pulling I couldn't get the sock out. Ultimately I had to put a screwdriver in the other side and little by little force the propeller to unwind the sock.
Once I got the sock out I COULD have just put the pump back in but I decided to replace it (the pump, not the sock) since I had gone to the trouble of removing it plus the fact that the spot where the shaft drives it looked a little stripped (no doubt from when it was running with the sock in there).
I found the part on AppliancePartsPros.com
but I decided to see if I could find it at my local appliance repair store so that I didn't have to wait to get it shipped out.
I got the part at my local small appliance repair store (I highly recommend that everyone find their local small appliance repair place, it's often a great source of parts and even advice). It cost me a little more to get it from the local store, but I was able to walk out with it and install it that night.
The installation of the new pump went well. However there were two snags (both due to my own incompetence):
1) After putting the pump in I was closing up the machine when I heard a "clink" and saw one of the springs in the back had come loose due to my moving around of the tub assembly. Try as I might to re-attach it, I discovered that the only way to reach it was to essentially remove the tub assembly from the casing. It wasn't hard to do, but it was annoying to think (as I was dis-assembling my washing machine) that were it not for that spring coming loose I would have been done long ago.
2) After reattaching the spring and closing up the machine I started a cycle with the tub empty. After some water came in I advanced the dial to the point where the pump should engage. As I had hoped water came out of the drain tube. So the next day I told my wife it was ready for duty. I didn't realize that while disassembling the machine for item 1 I had accidentally disconnected the sensor that tells the machine when to shut the water OFF. So our first load resulted in a wet mess on the floor. Luckily when I opened up the washer cabinet again I saw a tube that went from a sensor on the washtub to...nowhere and realized my mistake and reconnected it.
So overall I'm really happy that we didn't just buy a new machine or call a repairman. Usually a repairman call is at least $100 plus parts and I spent half that on my replacement part. Granted I spent several hours fiddling with the machine but now I feel that I know how a washing machine works and the actual troubleshooting and fixing of the problem was kind of fun.
The only remaining mystery is how the sock got in there in the first place, but some googling suggests that it isn't unheard of for a sock to slip between the metal inner tub and outer tub and work its way down to the drain pump. Interestingly enough the sock didn't look like one of ours so we think it belonged the previous owners. At least the next time the drain stops working I'll know exactly where to look.
Friday, September 10, 2010
My Biggest Do It Yourself Project
Posted By Paul
Frequent readers of this blog know that I aspire to being handy around the house with various levels of success.
Last week I took on what was without a doubt the largest project that I've ever attempted. The project was to put a new roof on my house.
Luckily I wasn't alone as my father-in-law is super handy and has done several roofs on both his house and others, so I was mostly serving as his assistant.
Here are some things that I learned from the experience:
1) If possible get the new shingles and supplies delivered to the roof. The packets of shingles don't look like much, but they are HEAVY. On the advice of my FIL, we had most of the shingles delivered directly to the roof and I am SOOOO glad we did. At one point I brought a couple packets of shingles down from the roof for cutting and later had to bring one back up again. Just wrestling that single packet of shingles up the ladder and onto the roof was a huge hassle, I couldn't image doing it over and over again.
2) Roofing spades are cool, but not essential. We had a roofing spade to clean off the old shingles. It worked fine, but so did a simple flat bladed spade that we also had. If you can borrow or already have a roofing spade that's great, but I wouldn't bother buying one. I included a picture of a roofing spade below that looks a lot like what we used.
3) Small crowbars and hammers are really useful. During the work you are almost constantly finding nails in the roof that you either need to remove or pound flat so it's nice to always have a hammer or crowbar within easy reach.
I had a mini-crowbar like the one below which was nice since we could use it easily with one hand.
4) A nail gun REALLY helps. Luckily my FIL had access to a nail gun and compressor. It is a big time saver, especially if you're not the best hammer swinger in the world (my FIL is great with a hammer, but I mess up 1 in about every 5 nails).
5) Plan for safety! One thing I would have done differently if I had it all to do over again would be to get up on the roof early and make plans for any support scaffolding or safety gear we needed. My house isn't huge but certain parts of the roof are somewhat steep and high enough that a safety line was really good to have. Luckily we were able to borrow a safety harness from Matt (who uses it for rock climbing) and lukcily I had some extra lumber around that we were able to turn into scaffolding. If you are roofing a single story house where the roof isn't too steep safety gear and scaffolding might not be a priority, but I suggest making those decisions early so that you can get any supplies or equipment before you start.
6) Roofing blades - these are just these little blades that have a hook edge. My FIL suggested we get some and I am very glad that I did. They cut shingles so much better than a normal box cutting blade. The hook end lets you cut the shingle without worrying too much about cutting through whatever is underneath, which is handy when you are trying to cut shingles on the roof. Get plenty since they do get dull after cutting through shingles for a while (we went through 6 blades in just a few days). I included a link below to get an idea of what I am talking about:
The roofing project took over a week. It was just my FIL and I, and luckily the weather cooperated but it was still a solid week of being on the roof from morning until dark (with breaks for lunch and dinner). The work was pretty hard and on the hot days it got pretty miserable.
The good news is that when the roof is done you get a real sense of satisfaction and you save a lot of money by doing it yourself.
Overall, if you enjoy doing projects yourself and you have access to the proper tools and someone who knows what they are doing then roofing can be a really rewarding way to save some money.
Frequent readers of this blog know that I aspire to being handy around the house with various levels of success.
Last week I took on what was without a doubt the largest project that I've ever attempted. The project was to put a new roof on my house.
Luckily I wasn't alone as my father-in-law is super handy and has done several roofs on both his house and others, so I was mostly serving as his assistant.
Here are some things that I learned from the experience:
1) If possible get the new shingles and supplies delivered to the roof. The packets of shingles don't look like much, but they are HEAVY. On the advice of my FIL, we had most of the shingles delivered directly to the roof and I am SOOOO glad we did. At one point I brought a couple packets of shingles down from the roof for cutting and later had to bring one back up again. Just wrestling that single packet of shingles up the ladder and onto the roof was a huge hassle, I couldn't image doing it over and over again.
2) Roofing spades are cool, but not essential. We had a roofing spade to clean off the old shingles. It worked fine, but so did a simple flat bladed spade that we also had. If you can borrow or already have a roofing spade that's great, but I wouldn't bother buying one. I included a picture of a roofing spade below that looks a lot like what we used.
3) Small crowbars and hammers are really useful. During the work you are almost constantly finding nails in the roof that you either need to remove or pound flat so it's nice to always have a hammer or crowbar within easy reach.
I had a mini-crowbar like the one below which was nice since we could use it easily with one hand.
4) A nail gun REALLY helps. Luckily my FIL had access to a nail gun and compressor. It is a big time saver, especially if you're not the best hammer swinger in the world (my FIL is great with a hammer, but I mess up 1 in about every 5 nails).
5) Plan for safety! One thing I would have done differently if I had it all to do over again would be to get up on the roof early and make plans for any support scaffolding or safety gear we needed. My house isn't huge but certain parts of the roof are somewhat steep and high enough that a safety line was really good to have. Luckily we were able to borrow a safety harness from Matt (who uses it for rock climbing) and lukcily I had some extra lumber around that we were able to turn into scaffolding. If you are roofing a single story house where the roof isn't too steep safety gear and scaffolding might not be a priority, but I suggest making those decisions early so that you can get any supplies or equipment before you start.
6) Roofing blades - these are just these little blades that have a hook edge. My FIL suggested we get some and I am very glad that I did. They cut shingles so much better than a normal box cutting blade. The hook end lets you cut the shingle without worrying too much about cutting through whatever is underneath, which is handy when you are trying to cut shingles on the roof. Get plenty since they do get dull after cutting through shingles for a while (we went through 6 blades in just a few days). I included a link below to get an idea of what I am talking about:
The roofing project took over a week. It was just my FIL and I, and luckily the weather cooperated but it was still a solid week of being on the roof from morning until dark (with breaks for lunch and dinner). The work was pretty hard and on the hot days it got pretty miserable.
The good news is that when the roof is done you get a real sense of satisfaction and you save a lot of money by doing it yourself.
Overall, if you enjoy doing projects yourself and you have access to the proper tools and someone who knows what they are doing then roofing can be a really rewarding way to save some money.
Sunday, July 25, 2010
Crash Budgeting
Posted By Paul
As someone who has spent nearly all of their adult life budgeting, saving towards goals, AND trying to live a fairly healthy lifestyle, I was intrigued by the thoughts that came to me after reading the following article:
Why Budgets Fail: Leave My Latte Alone
It's a list of reasons why people are unable to stick to budgets and ways to help. I noticed the entry in the article called the "Gung-Ho Backfire":
---------
The Gung-Ho Backfire - You set up a strict budget and then wonder why you can't stick to it. By trying to cut spending too drastically, you create an unsustainable budget that is sure to buckle under pressure.
---------
I realized that the unhealthy approach described here was like the "crash diet" for saving money, where you create a goal that is so hard to maintain that you are practically guaranteed to fail.
For example:
I had a friend who was carrying some credit card debt that they wanted to eliminate (a great goal for sure). I was talking with them about the budget they had set up and discovered that they had set a goal of putting aside a certain amount of money each month to pay off their credit cards (I think it was something like $500 a month). I told them that I thought this was a great goal and since their debt wasn't huge they figured that they would be able to pay it off in about 6 months at this rate.
What actually happened? Well the first month went well. They managed to hit their goal and pay down their debt by $500.
The next month an unexpected car repair came up and since they didn't have a "rainy day fund" set up that had to come out of the money they hoped to set aside for their credit card debt.
The month after that they decided to splurge a little since the last two months had been all about saving, saving, saving. So they went on a shopping spree that ended up eating the savings for that month.
Things got worse after that and before long the budget and goal were simply forgotten.
I realized just now that this whole experience felt a lot like someone who was going through a crash diet.
By creating this specific savings goal my friend had slashed their budget to the bone. They had left no money for incidentals or the occasional bit of fun. Sort of like the crazy diet where you decide you'll only eat celery in anticipation of the pounds melting off of you.
The car repair was kind of like the holiday season or the vacation where you find it impossible to stick to your diet. So you get discouraged and feel like a failure, and you feel like maybe the goal is impossible.
The month where they decided to treat themselves is like the cheeseburger and ice cream sundae splurge after the miserable time spent on your crazy diet.
What follows is the same phenomenon you see with crash diets where the person can't stick with the diet and ends up quitting early. They often lose the dramatic results they gained at the start of the program (my friend quickly re-accumulated the credit card debt and then some).
At the time I thought the problem was that my friend didn't have the discipline to follow through on their plan, but now I think that a big part of the problem was that they set their expectations too high (just like with a crash diet).
You might be able to live the "pinch every penny" lifestyle like that for a while, but when you just can't keep it up anymore you give up on the plan AND the goal. This is too bad since the goal was probably attainable if you had just been able to accept a more moderate change with less dramatic results.
By creating such a hefty savings goal my friend had put budget constraints on them that were so strict that they couldn't follow them for more than a couple of months. If they had set a savings goal of $250 a month they might have been able to stick with their program and payoff their debt. Sure it would have taken twice as long but they would have reached it. It's the same way with a more moderate weight loss program where you make more moderate changes. Your results won't be as dramatic but at least you'll create a system that you'll be able to live with and maintain.
Maybe the problem with "crash dieting" and "crash budgeting" is that the goal is to create a temporary process so that you can fix a problem and then forget about it. What you really need in both cases is a long term plan that you can maintain so that the results actually last.
As someone who has spent nearly all of their adult life budgeting, saving towards goals, AND trying to live a fairly healthy lifestyle, I was intrigued by the thoughts that came to me after reading the following article:
Why Budgets Fail: Leave My Latte Alone
It's a list of reasons why people are unable to stick to budgets and ways to help. I noticed the entry in the article called the "Gung-Ho Backfire":
---------
The Gung-Ho Backfire - You set up a strict budget and then wonder why you can't stick to it. By trying to cut spending too drastically, you create an unsustainable budget that is sure to buckle under pressure.
---------
I realized that the unhealthy approach described here was like the "crash diet" for saving money, where you create a goal that is so hard to maintain that you are practically guaranteed to fail.
For example:
I had a friend who was carrying some credit card debt that they wanted to eliminate (a great goal for sure). I was talking with them about the budget they had set up and discovered that they had set a goal of putting aside a certain amount of money each month to pay off their credit cards (I think it was something like $500 a month). I told them that I thought this was a great goal and since their debt wasn't huge they figured that they would be able to pay it off in about 6 months at this rate.
What actually happened? Well the first month went well. They managed to hit their goal and pay down their debt by $500.
The next month an unexpected car repair came up and since they didn't have a "rainy day fund" set up that had to come out of the money they hoped to set aside for their credit card debt.
The month after that they decided to splurge a little since the last two months had been all about saving, saving, saving. So they went on a shopping spree that ended up eating the savings for that month.
Things got worse after that and before long the budget and goal were simply forgotten.
I realized just now that this whole experience felt a lot like someone who was going through a crash diet.
By creating this specific savings goal my friend had slashed their budget to the bone. They had left no money for incidentals or the occasional bit of fun. Sort of like the crazy diet where you decide you'll only eat celery in anticipation of the pounds melting off of you.
The car repair was kind of like the holiday season or the vacation where you find it impossible to stick to your diet. So you get discouraged and feel like a failure, and you feel like maybe the goal is impossible.
The month where they decided to treat themselves is like the cheeseburger and ice cream sundae splurge after the miserable time spent on your crazy diet.
What follows is the same phenomenon you see with crash diets where the person can't stick with the diet and ends up quitting early. They often lose the dramatic results they gained at the start of the program (my friend quickly re-accumulated the credit card debt and then some).
At the time I thought the problem was that my friend didn't have the discipline to follow through on their plan, but now I think that a big part of the problem was that they set their expectations too high (just like with a crash diet).
You might be able to live the "pinch every penny" lifestyle like that for a while, but when you just can't keep it up anymore you give up on the plan AND the goal. This is too bad since the goal was probably attainable if you had just been able to accept a more moderate change with less dramatic results.
By creating such a hefty savings goal my friend had put budget constraints on them that were so strict that they couldn't follow them for more than a couple of months. If they had set a savings goal of $250 a month they might have been able to stick with their program and payoff their debt. Sure it would have taken twice as long but they would have reached it. It's the same way with a more moderate weight loss program where you make more moderate changes. Your results won't be as dramatic but at least you'll create a system that you'll be able to live with and maintain.
Maybe the problem with "crash dieting" and "crash budgeting" is that the goal is to create a temporary process so that you can fix a problem and then forget about it. What you really need in both cases is a long term plan that you can maintain so that the results actually last.
Wednesday, July 14, 2010
Article: 10 products to always buy generic
Posted By Paul
I thought this was a pretty cool article:
10 products to always buy generic
Now that we have a little one with various toys we seem to go through batteries more quickly and we now just get whatever battery is cheapest and we haven't noticed any difference.
We often buy generic or store brands and only switch back to the name brand if we have a reason.
For example I have a cheesecake recipe that I'm rather proud of and I've noticed that whenever I make it with generic cream cheese it doesn't turn out as well. So I always go for the name brand when I'm going to make that particular recipe.
An interesting little article, check it out!
I thought this was a pretty cool article:
10 products to always buy generic
Now that we have a little one with various toys we seem to go through batteries more quickly and we now just get whatever battery is cheapest and we haven't noticed any difference.
We often buy generic or store brands and only switch back to the name brand if we have a reason.
For example I have a cheesecake recipe that I'm rather proud of and I've noticed that whenever I make it with generic cream cheese it doesn't turn out as well. So I always go for the name brand when I'm going to make that particular recipe.
An interesting little article, check it out!
Wednesday, June 16, 2010
The Hunt For The Perfect House
Posted By Paul
My wife and I have been in our current house (which was our first house) for about seven years and we recently started talking about moving. Having been in our place for a while we've learned a lot about what we would like in our next house.
So now we were faced with some really tough questions:
-Should we move?
-Can we move?
-What can we afford to move into?
I now appreciate what people mean when they say that buying your first house is the simplest since you don't have to deal with selling your OLD house as well. We decided to take it step-by-step.
We started off by browsing properties on the internet. We wanted to see if properties existed in the area that met our criteria to get an idea of what they cost.
That ended up being pretty easy. We discovered several properties that met the basic criteria of what we wanted. That told us that properties like we hoped for did exist (we wanted a little bit of land) and what they cost.
We then did some research to get an idea of what we could get for our house if we sold it. We tried to factor in a cushion to cover what we would do if there was a long gap between selling our old house and finding a new one.
We quickly end up with a spreadsheet where a lot of the numbers were guesses, but at least they were hopefully guesses grounded in the fact.
Based on a general idea of cost and a guess of what we could get for our current house it was simple math to figure out the mortgage payment we would need to swing in order to make it happen (based on the current mortgage rates).
Unfortunately that is where the process ended. The way the numbers worked out it looked like the mortgage payment for our dream house would be much bigger than we wanted to take on.
So now what? Well we're going to do three things:
1) Keep browsing the web for properties. You never know, maybe some amazing bargain will pop up.
2) Get our current house in shape for selling. This just means that any projects we decide to bite off will be based on the idea that we'll be selling this house in the semi-near future (so projects that help the resale value of the house get priority).
3) Save, save, save! Just because we can't afford our dream house now doesn't mean we can't get there. Towards that end we're focusing on paying down the mortgage (giving us more equity to put towards the next house) as quickly as we can without sacrificing our other "required" savings vehicles (rainy day fund, college fund, retirement, etc.).
It was tough looking at all of these cool properties and trying to figure out a way to get the numbers to work. Phrases like: "Well that mortgage payment wouldn't be TOO bad." keep going through your head. Luckily with a quickly growing toddler in the house it was easy to remember that unexpected expenses come up and that even if we COULD manage a bigger payment every month, it doesn't mean that we SHOULD.
Our hope is that if we stick to our plan that eventually we'll be able to afford our dream house and we won't be stuck in that "house poor" mode where we have a great house but we struggle to make the payment every month.
We'll keep you posted!
My wife and I have been in our current house (which was our first house) for about seven years and we recently started talking about moving. Having been in our place for a while we've learned a lot about what we would like in our next house.
So now we were faced with some really tough questions:
-Should we move?
-Can we move?
-What can we afford to move into?
I now appreciate what people mean when they say that buying your first house is the simplest since you don't have to deal with selling your OLD house as well. We decided to take it step-by-step.
We started off by browsing properties on the internet. We wanted to see if properties existed in the area that met our criteria to get an idea of what they cost.
That ended up being pretty easy. We discovered several properties that met the basic criteria of what we wanted. That told us that properties like we hoped for did exist (we wanted a little bit of land) and what they cost.
We then did some research to get an idea of what we could get for our house if we sold it. We tried to factor in a cushion to cover what we would do if there was a long gap between selling our old house and finding a new one.
We quickly end up with a spreadsheet where a lot of the numbers were guesses, but at least they were hopefully guesses grounded in the fact.
Based on a general idea of cost and a guess of what we could get for our current house it was simple math to figure out the mortgage payment we would need to swing in order to make it happen (based on the current mortgage rates).
Unfortunately that is where the process ended. The way the numbers worked out it looked like the mortgage payment for our dream house would be much bigger than we wanted to take on.
So now what? Well we're going to do three things:
1) Keep browsing the web for properties. You never know, maybe some amazing bargain will pop up.
2) Get our current house in shape for selling. This just means that any projects we decide to bite off will be based on the idea that we'll be selling this house in the semi-near future (so projects that help the resale value of the house get priority).
3) Save, save, save! Just because we can't afford our dream house now doesn't mean we can't get there. Towards that end we're focusing on paying down the mortgage (giving us more equity to put towards the next house) as quickly as we can without sacrificing our other "required" savings vehicles (rainy day fund, college fund, retirement, etc.).
It was tough looking at all of these cool properties and trying to figure out a way to get the numbers to work. Phrases like: "Well that mortgage payment wouldn't be TOO bad." keep going through your head. Luckily with a quickly growing toddler in the house it was easy to remember that unexpected expenses come up and that even if we COULD manage a bigger payment every month, it doesn't mean that we SHOULD.
Our hope is that if we stick to our plan that eventually we'll be able to afford our dream house and we won't be stuck in that "house poor" mode where we have a great house but we struggle to make the payment every month.
We'll keep you posted!
Saturday, May 22, 2010
Article: Dirty tricks financial advisers play
Posted By Paul
Hi Everyone,
I saw an article on CNN that I wanted to pass on. If you are a frequent reader of this blog you might get the feeling that I am "anti-adviser" from some of my earlier posts:
Adviser or Not?
What are you really paying for advice?
-and-
Article: Before of free financial advice.
It would be fair to say that I am very 'adviser skeptical' since it seems like so often the information they provide you can easily be obtained by just doing a little research, and the cost to you can be significant if you're not careful. There have been so many times where someone I know will mention a financial adviser that "works for free". When I ask my friend if the adviser has suggested a life insurance annuity and my friend says they haven't my standard response is: "Wait a few months, they will." I seem to always be right. To read more about annuities just select the posting label 'annuities' in this blog to bring up the articles where I discuss them.
Considering the role they play in your life, I think a certain level of adviser skepticism is healthy.
Here is the article:
Dirty tricks financial advisers play.
Hi Everyone,
I saw an article on CNN that I wanted to pass on. If you are a frequent reader of this blog you might get the feeling that I am "anti-adviser" from some of my earlier posts:
Adviser or Not?
What are you really paying for advice?
-and-
Article: Before of free financial advice.
It would be fair to say that I am very 'adviser skeptical' since it seems like so often the information they provide you can easily be obtained by just doing a little research, and the cost to you can be significant if you're not careful. There have been so many times where someone I know will mention a financial adviser that "works for free". When I ask my friend if the adviser has suggested a life insurance annuity and my friend says they haven't my standard response is: "Wait a few months, they will." I seem to always be right. To read more about annuities just select the posting label 'annuities' in this blog to bring up the articles where I discuss them.
Considering the role they play in your life, I think a certain level of adviser skepticism is healthy.
Here is the article:
Dirty tricks financial advisers play.
Monday, April 26, 2010
Article: Financial Peace In Tough Times
Posted By Paul
I liked this article on Debt Kid that talked about how an emergency fund was useful in a time of family crisis. We often think of emergency funds for times where our car breaks down or we discover a hole in our roof, but this was a great example of how having some extra money can also help when a family emergency comes up:
Feeling Financial Peace In Tough Times
I liked this article on Debt Kid that talked about how an emergency fund was useful in a time of family crisis. We often think of emergency funds for times where our car breaks down or we discover a hole in our roof, but this was a great example of how having some extra money can also help when a family emergency comes up:
Feeling Financial Peace In Tough Times
Wednesday, April 21, 2010
Article: America's Biggest Rip-offs
Posted By Paul
A cool article on CNNMoney about the biggest rip offs in America.
It defined a rip-off as something you use or consume that has a REALLY high mark up.
I thought that made some good choices. Ones in the list that I especially liked:
Text Messages - I rarely send text messages (at least in part because I'm not very practiced at typing them out on my phone) but when you think about the amount of data that is being sent, the prices are pretty ridiculous.
Movie theater popcorn - I've never been one to get snacks at a movie (usually because I feel like eating at the same time distracts me from the movie), but it comes as no surprise that movie theater popcorn was one of the major rip-offs. I liked the quote that was listed in this section:
"A lot of theater owners tell me, 'I consider myself working in concessions, not movies.'"
'Free' Credit Reports that aren't - beware of the 'free' services that sign you up for 'credit monitoring' for $15 a month and hope you don't notice.
Worth a read:
America's Biggest Rip-offs
A cool article on CNNMoney about the biggest rip offs in America.
It defined a rip-off as something you use or consume that has a REALLY high mark up.
I thought that made some good choices. Ones in the list that I especially liked:
Text Messages - I rarely send text messages (at least in part because I'm not very practiced at typing them out on my phone) but when you think about the amount of data that is being sent, the prices are pretty ridiculous.
Movie theater popcorn - I've never been one to get snacks at a movie (usually because I feel like eating at the same time distracts me from the movie), but it comes as no surprise that movie theater popcorn was one of the major rip-offs. I liked the quote that was listed in this section:
"A lot of theater owners tell me, 'I consider myself working in concessions, not movies.'"
'Free' Credit Reports that aren't - beware of the 'free' services that sign you up for 'credit monitoring' for $15 a month and hope you don't notice.
Worth a read:
America's Biggest Rip-offs
Friday, April 16, 2010
Follow up on my system for saving
Posted By Paul
One thing that I've been doing that has worked well for me is based on a REALLY old post of mine that talks about how I save money. Here is the article:
Simple System For Saving Money
I still use this system but now I tailor it a bit in that I keep a list of places that I like to put money when I have a little extra. For example here is my current list:
Roth
Mortgage
Car Loan
Child College Fund
Fun Fund
Rainy Day Fund
I just keep this list in a text document and whenever I have more than my 'target amount' in my checking account I transfer $100 to the item that is at the top of the list and then that item moves to the bottom.
I like this system because I can change the list easily if I ever want to divert money to saving for a new goal. I can even put the same item in the list multiple times if I ever want to save towards a specific goal faster.
You may notice too that I have 'Fun Fund' in the list. This has been a great addition in that every dollar that goes into that account (which is just an account in my ISA that I labeled 'Fun Fund') is intended to be spent on something fun. It's a great way to give yourself a reward for saving. It's also a really nice way to save up money in preparation for a vacation or some other fun event. We don't even know what exactly we're saving for (though it'll probably be some sort of vacation when our child is old enough to travel), but it's great to have the money set aside and to see it growing.
One thing that I've been doing that has worked well for me is based on a REALLY old post of mine that talks about how I save money. Here is the article:
Simple System For Saving Money
I still use this system but now I tailor it a bit in that I keep a list of places that I like to put money when I have a little extra. For example here is my current list:
Roth
Mortgage
Car Loan
Child College Fund
Fun Fund
Rainy Day Fund
I just keep this list in a text document and whenever I have more than my 'target amount' in my checking account I transfer $100 to the item that is at the top of the list and then that item moves to the bottom.
I like this system because I can change the list easily if I ever want to divert money to saving for a new goal. I can even put the same item in the list multiple times if I ever want to save towards a specific goal faster.
You may notice too that I have 'Fun Fund' in the list. This has been a great addition in that every dollar that goes into that account (which is just an account in my ISA that I labeled 'Fun Fund') is intended to be spent on something fun. It's a great way to give yourself a reward for saving. It's also a really nice way to save up money in preparation for a vacation or some other fun event. We don't even know what exactly we're saving for (though it'll probably be some sort of vacation when our child is old enough to travel), but it's great to have the money set aside and to see it growing.
Sunday, March 7, 2010
Article: Lifestyle Inflation
Posted By Paul
If you read the article that I posted about earlier:
The secret lives of American debtors
I mention Blake and his blog about trying to get out of debt.
One of his recent articles was entitled:
How to Prevent Lifestyle Inflation
Which I thought was a great article because it focuses on the psychology of spending pressure. He talks about the subtle pressures to spend more based on where you live.
The idea of "keeping up with the Joneses" is nothing new, but I like the fact that his first suggestion is to acknowledge the pressure. No one wants to say that they are experiencing "spending peer pressure" but of course we all experience it to varying degrees. Just like the old saying that the first step to fixing a problem is admitting that it exists, the first step in resisting a temptation is admitting that you are tempted.
I also liked his third point which was to allow yourself to inflate your lifestyle a little. You are not a bad person if you give yourself these little rewards here and there (provided that your circumstances are such that you can actually afford them).
I talk about similar ideas in some of my earlier posts:
My Financial Philosophy
Financial choices: Good Vs Better
Know Your Indulgence
If you read the article that I posted about earlier:
The secret lives of American debtors
I mention Blake and his blog about trying to get out of debt.
One of his recent articles was entitled:
How to Prevent Lifestyle Inflation
Which I thought was a great article because it focuses on the psychology of spending pressure. He talks about the subtle pressures to spend more based on where you live.
The idea of "keeping up with the Joneses" is nothing new, but I like the fact that his first suggestion is to acknowledge the pressure. No one wants to say that they are experiencing "spending peer pressure" but of course we all experience it to varying degrees. Just like the old saying that the first step to fixing a problem is admitting that it exists, the first step in resisting a temptation is admitting that you are tempted.
I also liked his third point which was to allow yourself to inflate your lifestyle a little. You are not a bad person if you give yourself these little rewards here and there (provided that your circumstances are such that you can actually afford them).
I talk about similar ideas in some of my earlier posts:
My Financial Philosophy
Financial choices: Good Vs Better
Know Your Indulgence
Friday, February 26, 2010
Article: Taking Frugality Too Far
Posted By Paul
I thought this was a good article on when you have taken Frugality too far. I especially liked that they call out not tipping in restaurants as an example of 'frugality gone wrong':
Taking Frugality Too Far
I thought this was a good article on when you have taken Frugality too far. I especially liked that they call out not tipping in restaurants as an example of 'frugality gone wrong':
Taking Frugality Too Far
Article and Blog: Hiding debt: The secret lives of American debtors
Posted By Paul
An interesting article today on CNNMoney. It talked all about people who accumulate debt secretly. Trying to hide it from their loved ones, often with disastrous results. It sounds like hiding debt must be an incredibly shameful and stressful secret to have. Hearing people talk about the experience reminded me of stories from people trying to hide affairs or drug habits.
Check it out:
Hiding debt: The secret lives of American debtors
The story of Blake who lost $250,000 ($150k of which belonged to his mom) and tried to hide it was incredible.
I looked at his blog which was mentioned in the article. It looks interesting enough that, I plan to follow it:
www.debtkid.com
An interesting article today on CNNMoney. It talked all about people who accumulate debt secretly. Trying to hide it from their loved ones, often with disastrous results. It sounds like hiding debt must be an incredibly shameful and stressful secret to have. Hearing people talk about the experience reminded me of stories from people trying to hide affairs or drug habits.
Check it out:
Hiding debt: The secret lives of American debtors
The story of Blake who lost $250,000 ($150k of which belonged to his mom) and tried to hide it was incredible.
I looked at his blog which was mentioned in the article. It looks interesting enough that, I plan to follow it:
www.debtkid.com
Wednesday, February 24, 2010
Article: Overcome marriage money challenges
Posted By Paul
I read an article on the dollar stretcher that I really liked. So many aspects of the article reminded me of things that my wife and I do to handle money in our marriage, such as:
-Using rewards credit cards (never carrying a balance but splurging with the reward money)
-Saving up for expensive items (which also gives you time to decide if you really want or need the item in the first place)
Worth a read for all married couples, whether or not spending is a source of friction in your marriage:
Overcome marriage money challenges
I read an article on the dollar stretcher that I really liked. So many aspects of the article reminded me of things that my wife and I do to handle money in our marriage, such as:
-Using rewards credit cards (never carrying a balance but splurging with the reward money)
-Saving up for expensive items (which also gives you time to decide if you really want or need the item in the first place)
Worth a read for all married couples, whether or not spending is a source of friction in your marriage:
Overcome marriage money challenges
Tuesday, January 26, 2010
My Car Buying Experience
Posted By Paul
My wife and I decided to finally replace our car with a new one and I thought I'd share my experience in the hope that it's of use to people.
First of all if you are one of those people who loves the car buying process, specifically the negotiation and back and forth with the salesperson, this posting is NOT for you.
I am NOT one of those people who loves that process. I find it exhausting and more trouble than it's worth, so my experiences and tips are based on the goal of getting a good deal on a car without a lot of hassle.
So here are the steps I took and how it went:
Step 1: Pick a car.
My wife and I did our research including checking out consumer reports and came up with a car that seemed promising. We went to a dealership and looked at the actual models on the lot and picked up some information on the different features that you could add and how much they cost. Based on that we came up with the exact model we wanted in 3 colors that we liked.
Step 2: Determine price.
For this step we decided to try two different car buying services. These are just services that are offered through various organizations where they have a pre-negotiated price for a model. We tried one that was through our credit union and the other was through CostCo.
We tried the credit union service first. It was just a phone call where we told them the car we wanted, they did a little research and told us the price they could get for us. No haggle, no hassle, no pressure. When I told them I was going to think about it they said no problem and that was that.
The CostCo service is a little more complicated. You go to a webpage (or you can call them) and you tell the kind of car you are looking for and where you live. Based on that information they give your contact info to one of their dealer affiliates and the dealer contacts you. The dealer tells you the price of the car (supposedly they need to do it in person so that they can see your CostCo card but in many cases they will tell you the price over the phone) and if you want to take it great, and if not, no big deal.
One warning:
Our first experience with the CostCo service was terrible. The dealer had us set up an appointment to come in and see the car (and find out the price). When we came in it turned into the same old dealer experience (lots of tedious sales tactics, etc.). When the sales person said: "What would it take to get you to buy this car today?" I just left.
To their credit CostCo called me to get my feedback on my experience with the service and when I told them how much I didn't like it they told me that what I was expecting WAS what was SUPPOSED to happen and they offered to set me up with another dealer. We decided to give CostCo one more try.
The second dealer was great, no pressure just: here's the price.
By the way, the price offered through our credit union and CostCo were essentially the same.
Step 3: Do a little financing research.
I came to the dealership already knowing the best interest rate that I could get through my credit union. The dealership was having an incentive rate for financing that was 1% less than the credit union rate so we decided to finance with the dealer. By coming into the dealership knowing the rate I could get from my credit union it was an easy decision to make when it came down to financing.
By following these steps the car buying process was a breeze (well except for that first CostCo experience which was a disaster).
The next time we decide to buy a new car I will definitely use a car buying service and avoid having to deal with a pushy salesperson.
My wife and I decided to finally replace our car with a new one and I thought I'd share my experience in the hope that it's of use to people.
First of all if you are one of those people who loves the car buying process, specifically the negotiation and back and forth with the salesperson, this posting is NOT for you.
I am NOT one of those people who loves that process. I find it exhausting and more trouble than it's worth, so my experiences and tips are based on the goal of getting a good deal on a car without a lot of hassle.
So here are the steps I took and how it went:
Step 1: Pick a car.
My wife and I did our research including checking out consumer reports and came up with a car that seemed promising. We went to a dealership and looked at the actual models on the lot and picked up some information on the different features that you could add and how much they cost. Based on that we came up with the exact model we wanted in 3 colors that we liked.
Step 2: Determine price.
For this step we decided to try two different car buying services. These are just services that are offered through various organizations where they have a pre-negotiated price for a model. We tried one that was through our credit union and the other was through CostCo.
We tried the credit union service first. It was just a phone call where we told them the car we wanted, they did a little research and told us the price they could get for us. No haggle, no hassle, no pressure. When I told them I was going to think about it they said no problem and that was that.
The CostCo service is a little more complicated. You go to a webpage (or you can call them) and you tell the kind of car you are looking for and where you live. Based on that information they give your contact info to one of their dealer affiliates and the dealer contacts you. The dealer tells you the price of the car (supposedly they need to do it in person so that they can see your CostCo card but in many cases they will tell you the price over the phone) and if you want to take it great, and if not, no big deal.
One warning:
Our first experience with the CostCo service was terrible. The dealer had us set up an appointment to come in and see the car (and find out the price). When we came in it turned into the same old dealer experience (lots of tedious sales tactics, etc.). When the sales person said: "What would it take to get you to buy this car today?" I just left.
To their credit CostCo called me to get my feedback on my experience with the service and when I told them how much I didn't like it they told me that what I was expecting WAS what was SUPPOSED to happen and they offered to set me up with another dealer. We decided to give CostCo one more try.
The second dealer was great, no pressure just: here's the price.
By the way, the price offered through our credit union and CostCo were essentially the same.
Step 3: Do a little financing research.
I came to the dealership already knowing the best interest rate that I could get through my credit union. The dealership was having an incentive rate for financing that was 1% less than the credit union rate so we decided to finance with the dealer. By coming into the dealership knowing the rate I could get from my credit union it was an easy decision to make when it came down to financing.
By following these steps the car buying process was a breeze (well except for that first CostCo experience which was a disaster).
The next time we decide to buy a new car I will definitely use a car buying service and avoid having to deal with a pushy salesperson.
Friday, January 22, 2010
Frugal in the new year!
Posted By Paul
Happy New Year!
Sorry that this blog has been so quiet recently, but times have been hectic and I haven't been able to post for a while (I was busy shopping for a new car, you can hear all about it in an upcoming post).
Now that it's the new year my wife and I have been going over our various expenses and seeing if there are ways to save a few dollars here and there. My wife and I already life pretty frugally so there aren't many places to save money, but I think it's still a good idea to at least take a look once a year.
One thing we did decide to cut back on this year was the newspaper. My wife and I would often have breakfast and read the paper so it was nice to have the Sunday paper delivered every week. Once we had a child we noticed that breakfasts aren't quite as leisurely as they once were so we don't have the long meals to peruse the paper, so some weeks we barely even look at it.
It's a very small expense but we decided to cancel it for now and add the money we save to our child's college fund. It's a small difference, but we figure that every dollar counts.
We plan on making this quick once-over of our spending an annual tradition. Just a quick friendly discussion over dinner one night to think about all of our expenses and whether or not they are still "worth it" to us.
We're hoping that this will keep us from falling into the trap of spending month after month on something we don't really need or want simply because we never actually sit down together and make the decision to get rid of it.
Happy New Year!
Sorry that this blog has been so quiet recently, but times have been hectic and I haven't been able to post for a while (I was busy shopping for a new car, you can hear all about it in an upcoming post).
Now that it's the new year my wife and I have been going over our various expenses and seeing if there are ways to save a few dollars here and there. My wife and I already life pretty frugally so there aren't many places to save money, but I think it's still a good idea to at least take a look once a year.
One thing we did decide to cut back on this year was the newspaper. My wife and I would often have breakfast and read the paper so it was nice to have the Sunday paper delivered every week. Once we had a child we noticed that breakfasts aren't quite as leisurely as they once were so we don't have the long meals to peruse the paper, so some weeks we barely even look at it.
It's a very small expense but we decided to cancel it for now and add the money we save to our child's college fund. It's a small difference, but we figure that every dollar counts.
We plan on making this quick once-over of our spending an annual tradition. Just a quick friendly discussion over dinner one night to think about all of our expenses and whether or not they are still "worth it" to us.
We're hoping that this will keep us from falling into the trap of spending month after month on something we don't really need or want simply because we never actually sit down together and make the decision to get rid of it.
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